Hey guys, I am going to module7 exam next week, I have a question when I do the revision, anyone here can help?

If the company's ending inventory is understated by RM3000 and beginning inventory is overstated by RM5000, the company's operating income will most likely be,

A. overstated by RM2000
B. overstated by RM8000
C. understated by RM2000
D. understated by RM8000

This question is FIFO and LIFO like question, please, any master dealer here?

Cost of Sales = Opening Inventory plus Purchases minus Closing Inventory

Cost of Sales = +5000 +Purchase - (-3000)
= +5000 +3000
= +8000
Cost of sales is overstated by 8000, so profit is understated by 8000

Many thanks.

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Added on May 2, 2010, 12:53 pmAnother question,

Line Blue Bhd is a growth company and has a borrowed fund at the cost of 7% after taxes, pays 11% as cost of equity and raises its capital in proportion of 70% and 30% equity. Should the total operating cash flow is RM100,000, what is the PV of total operating cash flow.

A. RM65,659
B. RM66,659
C. RM69,656
D. RM65, 699

I have used WACC to get the discount rate which is 0.082. However when I use RM100,000/1.082, the answer is not there..

This post has been edited by tommy141184: May 2 2010, 01:42 PM

Sorry bro, this one.. not so sure. Is the question complete?

i got module1 exam this tuesday...

yes, the complete question...so nervous now..don't think I can pass

gud luck ! i knew module 7 were though..haha..never took one b4

what exam is this?

broker examination..lol